Following the financial crisis of 2008, fund managers at Barclays Global Investors were feeling smug: The group had built up impressive track records at the exact moment that one of its archrivals, BlackRock, had suffered losses. BGI managers thought they were finally catching up to their bigger rivals. “We felt like, ‘We’re on their trail now,’ ” says a former BGI executive.
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Matt Botein and Edwin Conway: There’s an information edge with a platform that invests across various asset classes and geographies on a day-to-day basis (Photographs by Chris Clinton)
The group’s enthusiasm wouldn’t last. Questions about the survival of BGI’s parent, Barclays, forced the British banking giant to sell its BGI unit to BlackRock for $13.5 billion—news that crushed the team spirit that had been driving BGI’s investment managers. “It took the wind out of everybody’s sails,” says the former BGI executive, one of several...